Irrevocable Life Insurance Trust
An Irrevocable Life Insurance Trust (ILIT) is a trust specifically written to own life insurance. The insured is usually the trust creator and is also the person who makes gifts to the trust to buy the life insurance. The insured’s family are typically named as the beneficiaries of the trust, and the trust is named as the owner and beneficiary of the policy. Some of the reasons to consider an Irrevocable Life Insurance Trust are:
- To create a large pool of non-taxable funds in the decedent’s estate.
- To provide liquidity in the case of illiquid estates (e.g., farms, family businesses).
- To provide funds for successive generations – specifically for education, medical expenses and other expenses as desired by the trust creator.
- To provide for a surviving spouse and also shelter the remaining corpus from future estate taxes.
- To equalize estates when a family business is given to a sibling.
First Midwest Bank has the requisite professionals, systems and procedures in place to administer trust-owned life insurance. We have been administering Irrevocable Life Insurance Trusts for decades, and can accept trust-owned life insurance policies of all types. Appointing First Midwest Bank as trustee can provide trust creators with the confidence that their efforts will eventually benefit their families.
To find out more about how an Irrevocable Life Insurance Trust can fit into your plans, contact a First Midwest Wealth Management Officer1 today.